Prior to commencing your search for a rental home, you as renter must understand how much rent you can afford. An effective method to figure out exactly how much rent you can afford is by thoroughly examining your household budget. By gaining accurate income and expense numbers, you can more confidently search for a rental home that aligns with your standard of living and financial means.
It is important to note that several property management companies provide a range of rental properties with different qualities and variations. Therefore, it is advisable to maintain flexibility and keep your options available during your rental home search.
Assess your monthly income and expenses
In the opinion of rental experts, it is typically suggested that you should be spending no more than 30% of your gross income on rent every year. That is your gross income before taxes and other deductions, not your take-home pay. Let’s say if your annual sources of income amount to $40,000, the advised maximum rent amount would be $1,000 per month.
This statement provides a simplified approach to figuring out how much rent you can afford. There are often other expenses that need to be factored in.
For illustration, if you have a lot of debt or make large monthly payments that you cannot change or reduce, these expenses must be included in your calculations. What is more, your budget should include a detailed list of two types of expenses: fixed and variable. The inclusion of food, transportation, medicine, utilities, and other essential expenses is recommended within the “fixed expenses” classification. The categories of entertainment, vacation travel, and other similar items would be included in the “variable” (a.k.a. optional) list.
Once you know how much you’re spending and where, you can more easily come to a realistic estimate of how much rent you can actually afford. Sticking to the 30% rule in areas with high rent may cause difficulties. It may be necessary to make adjustments to other expenses to better afford your rent.
How to approach landlords or property managers
Of course, how much you think you can afford to pay is only one-half of the equation. When applying for a rental home, different property management companies and landlords may have varying criteria for determining an ideal tenant. Even if you can demonstrate that you can afford the advertised rental rate, some property managers or landlords may refuse to offer you a lease due to several reasons.
In certain cases, it is possible that the rental home you desire may already be leased to someone else. In such times, it’s critical to stay positive and continue to manage or improve your financial situation. It is important to note that being unsuccessful in getting a specific rental home doesn’t necessarily indicate that you’re not a strong candidate for another property. As long as you’re applying for rental homes within your affordability range, the right one will come along.
Are you seeking a new rental residence in the vicinity of White River Junction or its surrounding areas? Real Property Management Beacon can provide assistance! Check our available listings and feel free to reach out with any questions.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
